Banking in Botswana – how safe is your money?

The IMF making that request resonates with me because some Batswana have previously suffered at the hands of Botswana’s lax banking laws. I’m no expert, but I’m guessing tightening banking laws would mean banks are held more accountable, that people would sleep better knowing that their money was safe. In my opinion, a lot could be done to improve local banking practices.

Case of the mysterious disappearance of money

As recently as 2010, there seemed to be a lot of incidents in which countless Batswana mysteriously lost money, but never received the support they needed from their banks. But lest we tar all banks with the same brush, some banks such as Barclays and First National Bank Botswana did do right by their customers, ensuring their cases were fairly resolved.

The thing I find callous and downright sinister about the banks that chose not to refund people their money is that many of the affected customers were older people from far-flung villages, who had no means of taking their cases further, and simply gave up all hope of ever having their money returned.

P100,000 lost to Standard Chartered Bank, never to be seen again!

A case which to this day remains a sore point for me is that of my parents, who ‘lost’ just over P100,000 and never had a thebe of it returned. Their account was with Standard Chartered Bank who not only refused to refund the money, but accused my parents of possibly having been careless with their bank details!

Before we even get to the fact that my parents never got their money back, I am shocked at how they arrived at that conclusion, especially given the evidence my parents presented to them. I don’t know anywhere in the world where a bank would get away with making such a claim without proof to support their accusation. It is the shoddiest of professional conduct that should never be levelled at any customer, whether or not it’s the stance the bank holds.

A living nightmare

My parents had been loyal customers of Standard Chartered Bank for some 30+ years. They are not wealthy people and their account had never really seen such an ammount before. The money was part of my mother’s retirement settlement. They had waited many years for this day and had made plans on how to use the money in their retirement.

My mother is Motswana and my father is Danish, he came to Botswana over 40 years ago. In that time he has only been able to visit family and friends in Denmark a handful of times. In 2010, they decided to use some of my mother’s settlement to go to Denmark for what could be the last time, and visit me and my husband in the UK, which is where I was living at that time. Unfortunately, the holiday didn’t start off well, as they were stranded in South Africa due to the eruption of the Icelandic volcano whose name nobody can pronounce – Eyjafjallajökull.

As you may remember, the residual ash from the eruption affected visibility to the point where most planes across the globe were grounded. The volcanic ash didn’t clear for days, meaning they spent almost two weeks in South Africa, where they inevitably used their bank cards a few times.

You couldn’t make it up… the P100,000 that disappeared from their account was syphoned through several withdrawals of P2,000 per day amounting to P10,000 over a period of a week and a half. This immediately raises a red flag. Why did the bank not track this unusual activity and freeze their account until they had verified with my parents that the withdrawals were legitimate? Why didn’t they do something to ensure it wasn’t being stolen? Instead, my parents were in Denmark blissfully unaware until they needed to access their account, only to realise they had just P50 left!

Now, as anyone will tell you, credit and bank card fraud is rife in South Africa and indeed the whole world. This is where the crime was committed as all the withdrawals were made at random ATMs on the outskirts of Johannesburg, admittedly whilst my parents were still in South Africa. Although, my parents were stranded at the airport waiting for the next available flight to Europe, why would they use this precious time to make random visits to areas outside of the city?

When they discovered their money was gone they rang Standard Chartered Bank, who was of absolutely no help to them. Naturally, their first holiday for decades (and possibly their last) was ruined. They had no money so relied on friends and family for financial support with the view they would resolve the matter upon their return to Botswana and pay everyone back.

Suffice to say Standard Chartered Bank cleared themselves of any wrongdoing and came to the conclusion my parents were at fault and therefore refused to cover the lost. My father had gone to the bank to speak with the bank manager, my mother wasn’t able to make the journey as this whole situation had impacted on her health. My father was handed a letter indicating the bank’s final stance and wasn’t even granted an audience with the bank manager he had scheduled an appointment to see.

A glimpse at the global perspective

When my parents visited me and my husband in the UK, we took them to both my bank and my husband’s bank to sound them out on how they would handle a case of this nature. I knew what they would say, but I just wanted my parents to hear it with their own ears, to open their eyes to the archaic manner in which their case was being handled. Long story short, the bank staff at both branches were horrified, even incredulous.

Where some Botswana banks get away with this behaviour, most properly regulated world standard banks would be held accountable and their security systems/protocol would be called into question.

Although, it would be rare for this situation to happen for someone with a UK bank account. If it did, the bank would take full responsibility. It wouldn’t be for the customer to prove what steps they took to safeguard their money; it would be the exact opposite.

The UK banks even commented that in such circumstances they would not leave their customers stranded overseas with no money. They would credit their account with adequate funds for the remainder of their trip, which would be reclaimed in the event the bank reimbursed the money that was stolen. In the meantime the bank’s fraud department would carry out an investigation.

Afterall a bank’s primary function is to ensure customer statisfaction and peace of mind that their money is safe and secure.

Banks in other countries fully understand they would feel the very long arm of the law for this type of conduct. UK banks set daily limits for cash withdrawals and also observe their customers’ spending trends to keep a sharp eye on any irregular activity. First off, even before a customer exceeds their daily limit, if the customer is spending more than what is considered normal; the bank temporarily blocks the card until security checks have been passed. If you’re in a store for instance, this includes the assistant calling the bank and you have to verify your identity by answering security questions. Only when the bank is satisfied does it unblock your card.

If you’re withdrawing unusually excessive amounts of money from an ATM, that raises a red flag. The ATM might return your card and a message asking you to contact your nearest branch will appear on the screen, or your card may get retained to stop any further money leaving your account. While it may well be frustrating, your money is safe and banks make it their business to ensure it remains safe. So really, chances of huge chunks of money disappearing from your account over a sustained period of time before it raises a red flag are rare.

If it does happen, your bank doesn’t hold you to ransom, let alone point fingers at you, much less refuse to refund the money AND get away with it. In any case the bank would conduct an investiagtion and present their findings face-to-face with their customers. My parents and countless others sought legal counsel and even from the Bank of Botswana, all in vain. Sadly, they ultimately resigned themselves to having lost the money. They were unable to cover the financial cost of a lawsuit and by this time, they were defeated and had lost the will to continue fighting for justice. The whole thing is so mind-boggling, it sounds like the stuff of movies!

For an example of how banks in the UK are held accountable for misconduct, click the image below.

Personally, I think the banking system failed and ought to hang their heads in shame. For the bank to have turned around and said my parents were welcome to sue, fully knowing they could ill-afford to do so was callous beyond description.

In the initial stages, a member of staff (who was actually standing in for another member of staff) agreed to meet with my parents. She actually agreed, based on their evidence (printouts of the transactions) and the fashion in which the money disappeared, it looked very fishy! In my honest opinion, the bank knew exactly what happened; the security systems they had/have in place were/are far from robust, and clearly, they took their eye off the ball while money was being stolen out of their customers’ accounts. So rather than pay all those people, they fobbed them off. But while P100,000 is a drop in the ocean for a bank like Standard Chartered, it was my parents’ hard earned money and their only source of finance in their retirement.

So when I read that the IMF is calling on Botswana to tighten its banking laws, I feel this directive has come too late for all those people who in 2010 lost hundreds of thousands of Pula and will never get it back!

Have you or anyone you know ever had money go missing from your/their bank account? Was the money ever returned? Please feel free to leave a comment.